Help needed, deduction from wages

MissMotivation

I started working for a company on 24th february this year and signed a contract of employment which states "the company reserve the right to reclaim any guaranteed commission payments should your employment be terminated by either party within the first 6 months of employment"

They terminated my employment last week on the grounds that "it isn't working out and we are restructuring the office". I was on a 3 month probabtion period so they can do this. In the meeting they said that they didn't have to give me any notice but they would honour a weeks notice period and let me have use of the company car for the week.

Today was payday and they have deducted the £1200 guaranteed commission, I know that they can do this but didn't think that they would because they terminated my employment and also the commission that they will earn from business I have done over the last 3 months will far outweigh the £1200.

It's left me in an impossible financial situation and I wondered whether anything would be gained by appealing to their better nature and asking if they would make an exception and not make me pay the £1200 back to them (plus they gave me no warning they were going to do this)

What does everyone think?

SarEl

Their better nature? :rotfl:

They had the right to do this, and I have no idea what made you think they wouldn't when the agreement said that they would. You can certainly try it but I wouldn't be holding my breath. You were, however, entitled to the weeks notice (assuming your contract doesn't stipulate more), so they were not doing you any favours. And I cannot see them starting to do you any now.

MissMotivation

I know I'm clutching at straws but desparation makes you do stupid things! I honestly thought that they would only claw back the money if I terminated the employment and not them....stupid now I know!

I've never known any company to take the guaranteed commission back from the employee and to say I was shocked when I saw my bank balance is an understatement!

ceh209

Does this deduction take you under the minimum wage for the period it relates to? (I'm not sure what your basic pay / commission structure is) That's the only way I could see that you could get any of it - i.e. make it up to NMW.

Evilm

As the clause is written you don't have any wiggle room on it. It does state "either party" so they are keeping to the contract.

The only thing you can do is approach CAB/ACAS to see if this is considered an unfair and unenforceable clause. I however don't think you would be successful.

Sorry.

Sambucus_Nigra

I can't understand how it's guaranteed if it isn't guaranteed...if you see what I mean.

ESKIMO

Do you mind if i ask how long the company has been operating? Is it a new start-up or well-established business (and also it's liability status - ie whether it's a private or public limited company, charity etc?)

MissMotivation

Sambucas

It doesn't make sense does it? It's not guaranteed at all unless you stay there more than 6 months! What is particularly upsetting is that during my three months employment I have earned them potential commission of approx £150,000 which they will get over the coming months and they have taken £1200 from me....it's a lot of money for me but not for them!

Eskimo

The company has been trading for approx 40 years but was taken over by current owners about 2 years ago. AFAIK it's a Limited Company

MissMotivation

ceh209 wrote: »

Does this deduction take you under the minimum wage for the period it relates to? (I'm not sure what your basic pay / commission structure is) That's the only way I could see that you could get any of it - i.e. make it up to NMW.

Basic salary was £15,000 and guaranteed commission was £400 per month for first three months. I worked approx 53 hours per week so I don't think it's below NMW.

ESKIMO

40 years wow! Then new management? Sounds shady to me!

When you said; 'the company reserve the right to reclaim any guaranteed commission payments should your employment be terminated by either party within the first 6 months of employment.' Without reading more into the ins and outs of this on the face of it I would seriously dispute this with your employer. On what grounds are they making this clause in your employment contract. reading between the lines unless this comprises part of your salary ie say a basic plus commission - you are entitled to this. However, say if this commission formed more of a 'bonus' then they would reserve the right not to pay it, which is what i think it sounds more like. - Just a very poorly worded EC if you ask me.

Going on from what ceh209 said, if it forms part of your NMW you are fully entitled to it.

As regards to; "it isn't working out and we are restructuring the office." - They can't do that. Provided you have worked your probationary period they would have to 'officially' make you redundant. Although the fact that you have worked there less than 12months means that you don't get any employment rights (ie redundancy pay). I have reason to believe that they are now increasing this to 24 months would you believe.

In a nutshell they can't make 'promises' on an EC and then make a 'get-out clause' to recoup what they have paid you in addition. It comes under a fine line of NMW and 'benefits in-kind' - like bonuses and commission - which are legally declared and therefore tax applicable. If you have paid tax on them. You are entitled to keep them. Always check your wage slips. KEEP THEM. DON'T LOSE THEM!

Also worth popping along to your local CAB - show them your evidence and they will be able to support you. On that grounds you should have a strong case to take them to an employment tribunal if you can's settle it yourself. I urge you to do this. Don't let them get away with it. Show the CAB your employment contract as well. They will be able to go over it with a fine toothcomb - much better than any of us can 'read between the lines'. x

ESKIMO

They can't pay you and then say; oh btw, things aren't really working out for us... you know your last weeks wages/commission - you need to give it back to us! They are in the wrong. Your commission formed part of your employment contact - t&cs of employment for which you are entitled to be remunerated - subject to NMW. They are totally contradicting themselves. Seriously appeal it!